Contrasting Noodles & Co (NDLS) & Famous Dave’s of America (DAVE)

Noodles & Co (NASDAQ:NDLS) and Famous Dave’s of America (NASDAQ:DAVE) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Profitability

This table compares Noodles & Co and Famous Dave’s of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noodles & Co -1.96% 2.23% 0.45%
Famous Dave’s of America -0.02% 21.87% 10.00%

Volatility and Risk

Noodles & Co has a beta of -0.22, meaning that its stock price is 122% less volatile than the S&P 500. Comparatively, Famous Dave’s of America has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Valuation & Earnings

This table compares Noodles & Co and Famous Dave’s of America’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Noodles & Co $456.49 million 0.72 -$37.48 million ($0.02) -372.00
Famous Dave’s of America $64.60 million 0.68 -$8.12 million $0.02 240.00

Famous Dave’s of America has lower revenue, but higher earnings than Noodles & Co. Noodles & Co is trading at a lower price-to-earnings ratio than Famous Dave’s of America, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Noodles & Co and Famous Dave’s of America, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noodles & Co 0 4 3 0 2.43
Famous Dave’s of America 0 0 0 0 N/A

Noodles & Co currently has a consensus price target of $11.08, suggesting a potential upside of 48.97%. Given Noodles & Co’s higher possible upside, equities analysts clearly believe Noodles & Co is more favorable than Famous Dave’s of America.

Insider and Institutional Ownership

71.1% of Noodles & Co shares are owned by institutional investors. Comparatively, 53.0% of Famous Dave’s of America shares are owned by institutional investors. 50.5% of Noodles & Co shares are owned by company insiders. Comparatively, 23.6% of Famous Dave’s of America shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Famous Dave’s of America beats Noodles & Co on 7 of the 13 factors compared between the two stocks.

Noodles & Co Company Profile

Noodles & Company develops and operates fast casual restaurants in the United States. It offers cooked-to-order dishes, including noodles and pasta, soups, salads, sandwiches, and appetizers. As of January 2, 2018, the company operated 412 company-owned and 66 franchised restaurants in 29 states, the District of Columbia. Noodles & Company was founded in 1995 and is based in Broomfield, Colorado.

Famous Dave’s of America Company Profile

Famous Dave's of America, Inc. develops, owns, operates, and franchises barbeque restaurants under the Famous Dave's name. It offers smoked, barbequed, and grilled meats, as well as entrée items and delicious side dishes that are prepared using prepared proprietary seasonings, sauces, and mixes. The company operates full-service and counter-service restaurants. As of March 5, 2018, it owned 16 locations and franchised 135 restaurants in 32 states, the Commonwealth of Puerto Rico, Canada, and the United Arab Emirates. Famous Dave's of America, Inc. was founded in 1994 and is headquartered in Minnetonka, Minnesota.

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